4Kids Entertainment, Inc. and Pokemon USA, Inc. have agreed not to renew the Pokémon representation agreement set to expire on December 31, 2005. Beginning in 2006, Pokemon USA, Inc.’s in-house licensing group will handle all Pokémon licensing outside of Asia.

Under the terms of the expiring Pokemon USA, Inc./4Kids representation agreement, 4Kids will continue to receive commissions for the next several years on payments made under existing Pokémon license agreements whose term expires after December 31, 2005. It is expected that commissions earned by 4Kids from the Pokémon property will decline over the course of the next several years. 4Kids will also continue next year to produce the current eighth season of Pokémon television episodes.